BlackBerry PlayBook Could Be In Trouble

Rumors circulate through the Internet faster than germs on an airplane, and a big one for today was that RIM may have stopped manufacturing the BlackBerry PlayBook. Reuters reported that an analyst with Collins Stewart made waves when he proclaimed that RIM halted production, citing factory layoffs at PlayBook manufacturer Quanta Computer and further unspecified “due diligence”.

RIM responded sharply to the rumors, indicating in no uncertain terms that the very idea was ludicrous and false.

However, given some other events of today and this week, it’s possible that the rumor has legs. RIM wouldn’t be the first company to deny a rumor that turned out to be true. (The phrase “Methinks thou dost protest too much” comes to mind.)

For one thing, the PlayBook was already struggling against stiff competition in the tablet space, and Amazon’s newly-announced Kindle Fire is likely to put another dent in the PlayBook’s sales. After HP’s hasty exit from the tablet market, it wouldn’t be a shocker to see RIM follow suit.

Further, the PlayBook’s price suddenly dropped; on Best Buy’s website, for example, the 16GB PlayBook now costs just $299--down from $499. (The Kindle Fire is slated to cost $199.)

RIM has also been hemorrhaging executives as of late, and the company lost another one today--Tyler Lessard, senior vice president for global alliances and developer relations. According to a Reuters report, senior vice president for platform marketing and alliances Jeff McDowell may have left recently as well. Losing so many high-level employees just doesn't bode well.

The company is also reportedly working on “superphones”, which may render the PlayBook irrelevant under RIM’s own roof. Thus, it would make sense to cut bait, liquidate the remaining inventory, and move on.

To that end, it’s also possible that RIM would want to sell off its remaining inventory and cease manufacturing new PlayBooks without saying anything about it, perhaps to prevent buyers from hesitating on dropping almost $300 on a tablet that they would worry wouldn’t be supported in the future.

(In HP’s case, it was a lot easier to move its discontinued TouchPads, as they were marked down to just $99.)

Perhaps this is all a bit of a stretch, a silly rumor ignited by a rogue analyst, but nothing about the news seems to point to anything particularly positive for the PlayBook. RIM will get a chance to quiet the rumors in a few weeks, when it’s scheduled to release a major software update for the beleaguered tablet.